Soros concerned about Chinese economy

Billionaire investor George Soros, who has made his mass fortune with calculated moves in world economies, says there are striking similarities between the current Chinese economy and that of the United States in 2008, when the economy suffered a massive correction that led to a recession. Soros has made a fortune estimated to be worth $24 billion, making him one of the world’s wealthiest men, and George Soros made that fortune in international finance, so when he speaks of economics, people notice.

Soros made his remarks at an Asia Society meeting in New York recently on Twitter. He noted the March figures show the Chinese economy to be worth 2.34 trillion Yuan, far higher than the projected 1.4 trillion. Instead of seeing that robust economy as good news, he is taking it as a warning sign. He said it signals the Chinese government is putting growth ahead of everything else, and refusing to reign in massive debt. George Soros also noted the Chinese banks have more debts than deposits, which is another troubling sign.

Chinese banks are lending to other banks to cover debt. They are also lending money to cover bad debt and to keep bad businesses afloat. Another similarity is a housing boom that has seen housing prices grow 62 percent in a very short time. He said those were the same conditions that were present in the United States when the recession hit in 2008.

Chinese officials have taken note of George Soros’ remarks, and have responded with editorials in official state media. Chinese officials say their economy is growing and that concerns are overblown. They noted Soros has made similar predictions before about other economies. It is true he has, and sometimes he was correct, and other times not.

But Soros has been right at crucial times. In 1992 on nytimes.com he was credited with breaking the bank of England. He gambled on a move that the British bank would be forced to devalue the Pound, and it happened. His bet netted him $1 billion off his investment.

Soros began his investment business in the early 1950s in the United States, and saw his hedge fund average gains of about 20 percent each year from 1969 to 2011.

Soros was born in Hungary to Jewish parents who had to get fake identification under Nazi occupation during World War II. After the war he went to England and studied at the London School of Economics. He moved to the United States in the early 1950s and started his international finance business.

Soros has also been involved with liberal causes and has supported democratic candidates for president. He is also founder of the Open Society Foundation, which works for human rights and open governments around the world.

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